Tag: gains

Asia Pacific markets started the trading week with gains despite China reporting that its economy grew at the lowest official pace in 28 years. Fourth quarter GDP growth was 6.4 percent, which was also in line with expectations. While Beijing’s official GDP figures are seen as one of the crucial indicators of China’s economic health, many outside experts have expressed skepticism about the veracity of the numbers. “Falling producer prices and new export orders point to a slowdown in China’s grow

Asia Pacific markets started the trading week with gains despite China reporting that its economy grew at the lowest official pace in 28 years.

The world’s second-largest economy grew 6.6 percent in 2018, which matched analysts’ expectations, and was lower than a revised 6.8 percent growth in 2017. Fourth quarter GDP growth was 6.4 percent, which was also in line with expectations.

“I think what we’re seeing actually in the fourth quarter is that while the economy is decelerating, we actually still have some of the supports,” Helen Zhu, head of China equities at Blackrock, told CNBC’s “Street Signs” on Monday. “For example, for most of the quarter, from the export front loading impact that we had probably before the Argentina G-20 (summit) when people’s expectations regarding trade became a little bit more optimistic.”

Chinese President Xi Jinping and U.S. President Donald Trump agreed to a 90-day pause in tariff escalation at the G-20 summit in Argentina late in 2018.

While Beijing’s official GDP figures are seen as one of the crucial indicators of China’s economic health, many outside experts have expressed skepticism about the veracity of the numbers.

Raymond Yeung, chief economist for Greater China at the Australia and New Zealand Banking Group, wrote in a note that China’s GDP numbers are “not an accurate gauge” of its economic growth. Still, he pointed out, the gap between the actual figures and the official targets usually shapes the government’s policy stance.

“Falling producer prices and new export orders point to a slowdown in China’s growth momentum,” Yeung added. “To celebrate the 70th anniversary of the founding of the People’s Republic of China in 2019, President Xi (Jinping) will still likely launch growth-supportive policies.”

The mainland Chinese markets, closely watched as a result of the ongoing U.S.-China trade fight, saw gains on the back of the data release. The Shanghai composite rose more than 0.5 percent to close at about 2,610.51 while the Shenzhen composite gained 0.607 percent to end its trading day at around 1,330.17. The Shenzhen component also advanced 0.592 percent to close at approximately 7,626.24.

On Friday, gold went negative on the week, its first down week in five. However, the precious metal is up 10 percent since hitting 52-week low in August, and the chart is now flashing a secret buy sign: The “golden cross.” Worth points out that a “wedge” has formed in the chart of gold over the past few years, and that’s got the technician looking for an bounce ahead for the metal. As for how high gold could run, Worth is looking to $1,300 as a “critical juncture” for the metal. According to the

On Friday, gold went negative on the week, its first down week in five. However, the precious metal is up 10 percent since hitting 52-week low in August, and the chart is now flashing a secret buy sign: The “golden cross.”

The term refers to what happens when the 50-day moving average crosses above its 200-day moving average. Investors have typically view this as a bullish signal that points to more upside — and Cornerstone Macro technician Carter Worth believes the gold bulls might just be right.

Worth points out that a “wedge” has formed in the chart of gold over the past few years, and that’s got the technician looking for an bounce ahead for the metal.

“The point is that there is a lot of tension and typically this setup is resolved in a dynamic way,” he said Thursday on CNBC’s “Futures Now,” adding that “our bet is it’s going to be resolved up.”

What’s more, gold is outperforming the overall commodities market, leading Worth to say that the metal is seeing “the prospect of an important breakout” — thanks to its strength.

As for how high gold could run, Worth is looking to $1,300 as a “critical juncture” for the metal. According to the technician, if gold manages to break through $1,300, a level it last hit in June, then a rally up to $1,350 is likely.

Job cuts at Tesla are not quite the bad news as first seemed, several Wall Street analysts said Friday. “Reducing headcount also suggests productivity gains,” Jefferies analyst Philippe Houchois said in a note to investors. Hours before the note, CEO Elon Musk announced that Tesla is cutting its full-time staff headcount by about 7 percent. The cut represents about 3,150 layoffs, based on the most recent Tesla staff count of 45,000 from Musk in October. Jefferies estimated the job cuts would aff

Job cuts at Tesla are not quite the bad news as first seemed, several Wall Street analysts said Friday.

“Reducing headcount also suggests productivity gains,” Jefferies analyst Philippe Houchois said in a note to investors. “This is, in our view, consistent with slower growth rates but mostly the scope to improve productivity and flow that we identified during our visit to the Fremont plant mid November 2018.”

Hours before the note, CEO Elon Musk announced that Tesla is cutting its full-time staff headcount by about 7 percent. The cut represents about 3,150 layoffs, based on the most recent Tesla staff count of 45,000 from Musk in October. Jefferies estimated the job cuts would affect 3,200 to 3,500 people at the electric vehicle maker. Houchois said the “reduction was not unexpected.”

“It’s not a huge surprise to see this,” Oppenheimer senior research analyst Colin Rusch said on CNBC’s “Squawk Box.”

“This looks to us like a mix of a proactive move in terms of cutting costs, … but also a bit of cleanup on the kind of massive push to get the Model 3 out this year,” Rusch added.

Kallo: Cost management is key as “Tesla transitions to its next phase of growth. … We would be buyers on weakness following the announcement.”

Ives: “Tesla will be able to emerge from the next 12 to 18 months” as a stronger and more profitable EV company.

Dorsheimer: Tesla’s business is now “set up for a more auspicious 2019.”

Glynn: “Encouraged that management is focused on achieving profitability each quarter after years of operating at significant losses.”

“You never want to see a growth company cutting staff like this but we’re not overly concerned,” Rusch said.

Citigroup’s Itay Michaeli was one of the few analysts skeptical of Tesla’s future following the announcement. Michaeli said in a note that the company’s lowered fourth quarter guidance and job cut announcement supports the “argument that Tesla’s [third quarter] results weren’t sustainable.”

Tesla’s stock fell 6.7 percent Friday from Thursday’s close of $347.31 a share.

If fewer people are buying homes, especially first-time buyers, then they remain renters, which is boosting the market. Rent prices for single-family homes increased 2.9 percent annually in November 2018, according to CoreLogic. Demand for rental homes is now so strong, and supply so low, that rents have nowhere to go but up. Of course all real estate is local, and hot markets like Las Vegas, Phoenix and Orlando are seeing the highest rent gains for single-family homes. “For example, rent prices

The slowdown in home sales and home price gains in most major U.S. markets is causing the opposite effect in the rental market, especially for single-family rental homes.

Home prices logged a 5.1 percent annual gain in November, the smallest gain since August 2015.

If fewer people are buying homes, especially first-time buyers, then they remain renters, which is boosting the market.

Rent prices for single-family homes increased 2.9 percent annually in November 2018, according to CoreLogic. That is up from 2.8 percent annual growth in November 2017.

Demand for rental homes is now so strong, and supply so low, that rents have nowhere to go but up. The gains are especially high for lower-end rental homes, up 3.8 percent annually in November. High-end rents, however are still gaining, up 2.6 percent annually compared with 2.3 percent gains in November 2017.

Of course all real estate is local, and hot markets like Las Vegas, Phoenix and Orlando are seeing the highest rent gains for single-family homes.

These markets were hardest hit during the housing crash more than ten years ago, as thousands of homes purchased by flippers using subprime mortgages defaulted on their loans. These cities had the highest foreclosure rates in the nation, and many of those foreclosures were purchased by large institutional investors and turned into rental properties.

Both Orlando and Phoenix are seeing strong employment gains at nearly five times the national rate. Consequently, demand for rentals is heating up.

Despite the gains, however, rents have still not seen the heat that the for-sale housing market has in the past few years.

“Long-term rent increases have been lower than long-term home price increases,” said Molly Boesel, principal economist at CoreLogic. “For example, rent prices increased 17 percent over the past five years, compared with a 32 percent increase in home prices over the same period. Additionally, lower-priced rentals and homes increase 1 ½ to 2 times faster than higher-priced rentals and homes.”

Vacancies for single-family rentals are very low and declined in November to 4.6 percent from 4.7 percent in October, according to Morningstar Credit Ratings. While part of that is seasonal, close to 79 percent of renters are renewing their leases, which is historically high.

Top technician says it’s time to fade the financials heading into earnings 5:52 PM ET Fri, 11 Jan 2019 | 05:56Financials were on the rise Monday after Citigroup kicked off earnings season with its latest quarterly results. According to one top technician, there’s something in the charts suggesting the gains may be a head fake as a number of other big bank names also gear up to report this week. “The behavior of this group isn’t very much different from the market at all,” said Carter Worth, head

Financials were on the rise Monday after Citigroup kicked off earnings season with its latest quarterly results.

According to one top technician, there’s something in the charts suggesting the gains may be a head fake as a number of other big bank names also gear up to report this week.

“The behavior of this group isn’t very much different from the market at all,” said Carter Worth, head of technical analysis at Cornerstone Macro. “There are some things that stick out to me that would suggest to fade [financials] here more than anything else.”

The XLF financials ETF is up more than 38 percent in the past three years, outperforming the broader market’s gains of 34 percent.

Worth’s charting revealed that despite those long-term gains, shares of the XLF have recently broken their uptrend around the $27 level and are down nearly 19 percent from their 52-week intraday high of $30.33 last January.

Financials jumped on the back of the 2016 election as investors bet that potential regulation rollbacks and a more pro-business approach from the Trump administration would give a boost to the space. However Worth illustrates that relative to the broader S&P 500, financials have now given back all of the post-election gains.

“We know that we are nowhere near where we were back during the election two years ago,” he said Friday on “Options Action.” “Basically financials have been underperforming on a relative basis and have undone all of the relative performance. That’s a fairly negative circumstance.”

Additionally Worth revealed that while shares of the XLF have bounced off the December lows they’re now approaching key resistance just above the $24 level where they initially broke trend.

“I’m a seller of XLF,” he said.

Shares of the financials ETF were trading higher Monday afternoon, at around $24.70.

Construction and materials were leading the gains in early deals, with Lafargeholcim up by 2 percent. The stock was upgraded to buy from underperform by Bank of America. There was also some momentum in personal and household goods due to stock upgrades. The U.K. housebuilder Taylor Wimpey rose 3.4 percent and led the gains across Europe. Renault shares were under the flatline too after news that former Nissan Motor Chairman Carlos Ghosn was indicted on two new charges of financial misconduct.

The pan-European Stoxx 600 was 0.2 percent with almost every sector in positive territory. Construction and materials were leading the gains in early deals, with Lafargeholcim up by 2 percent. The stock was upgraded to buy from underperform by Bank of America.

There was also some momentum in personal and household goods due to stock upgrades. The U.K. housebuilder Taylor Wimpey rose 3.4 percent and led the gains across Europe.

The Swiss company Straumann was also among the top gainers, after its CEO said that it wants to increase sales five-fold within a decade, Reuters reported.

On the other hand, Orion dropped more than 6 percent after Jefferies cut its grade on the pharma company. The research firm argued that the current 4.5 percent dividend yield is not enough to support the share price, Reuters reported.

Furthermore, Flybe fell as much as 90 percent after a consortium of Virgin Atlantic Ltd, Stobart Group and Cyrus Capital Partners agreed to buy the low-cost airline.

Renault shares were under the flatline too after news that former Nissan Motor Chairman Carlos Ghosn was indicted on two new charges of financial misconduct.

Asia stocks mostly gained Friday amid improved investor sentiment following overnight gains on Wall Street. The mainland Chinese markets, watched in relation to the ongoing trade war between Beijing and Washington, were higher on the day. The moves followed after officials from Washington and Beijing met for trade talks earlier this week — details about the progress were sparse. U.S. and China have halted an ongoing trade war to try and resolve sticking issues on a number of areas. “There are so

The mainland Chinese markets, watched in relation to the ongoing trade war between Beijing and Washington, were higher on the day. The Shanghai composite was up about 0.74 percent to close around 2,553.83 while the Shenzhen composite gained 0.758 percent to about 1,313.36. The Shenzhen component also rose 0.611 percent to close around 7,474.01.

Meanwhile, Hong Kong’s Hang Seng index gained about 0.5 percent, as of its final hour of trade.

The moves followed after officials from Washington and Beijing met for trade talks earlier this week — details about the progress were sparse. U.S. and China have halted an ongoing trade war to try and resolve sticking issues on a number of areas. Analysts who spoke to CNBC on Friday were divided whether a deal between the two economic powerhouses would be forthcoming.

“I think (U.S. President Donald) Trump wants to have a win and (Chinese leader) Xi Jinping desperately needs to have a win. So, I think they’re gonna come to some agreement … probably in the first quarter,” Andrew Collier, managing director at Orient Capital Research, told CNBC’s “Street Signs” on Friday.

Collier said, however, trade frictions between Washington and Beijing are unlikely to end as “China clearly … is a threat to the United States and plus it has done many things that many countries disagree with.”

Others did not agree.

“There are some that would argue that the Trump administration needs a deal, given that they’re walking into an election cycle in 2020 … I would respectfully disagree,” James Sullivan, head of equity research ex-Japan at J.P. Morgan, said. “What the Trump administration needs to do is incite his base. A deal, by definition, means compromise. Compromise doesn’t incite.”

The euro surged to a high of $1.1581 overnight, its highest level since mid-October before trimming some of its gains and settling at $1.153, broadly steady on the day. The surge in the euro took some traders by surprise who had added some big stop losses around the $1.15 levels, forcing them to unwind their positions and prompting further euro gains. That has lifted China’s offshore yuan to its highest level since August along with recent assurances from Beijing of further fiscal boosts to the

The euro consolidated gains on Thursday after posting its biggest daily jump in more than six months, having cleared some key market levels after Fed minutes signaled a more cautious approach towards further rate hikes.

With the euro broadly hemmed in a $1.12-$1.15 range over the last three months, the dovish minutes gave dollar bears a further excuse to buy the euro, propelling it past a 100-day moving average, a level it hasn’t traded above in more than three months.

The euro surged to a high of $1.1581 overnight, its highest level since mid-October before trimming some of its gains and settling at $1.153, broadly steady on the day.

“This is more of a dollar bearish story causing some stop losses to be triggered around key levels rather than a rerating of the European story,” said Kamal Sharma, director of G10 FX strategy at Bank of America Merrill Lynch in London.

The surge in the euro took some traders by surprise who had added some big stop losses around the $1.15 levels, forcing them to unwind their positions and prompting further euro gains. Data out of Europe has been fairly tepid. French industrial production fell more than expected in November while Swedish private sector production data was fairly flat.

Minutes from the Fed’s Dec. 18-19 meeting showed that several policymakers were in favour of the U.S. central bank keeping rates steady this year.

“This drop in the dollar is an overdue correction following a surprisingly robust few weeks despite the massive collapse in U.S. rate expectations,” said Ulrich Leuchtmann, a currency strategist at Commerzbank.

China and the United States have extended trade talks in Beijing, boosting oil prices and broader sentiment.

That has lifted China’s offshore yuan to its highest level since August along with recent assurances from Beijing of further fiscal boosts to the slowing economy.

The yuan has breached the key 6.8 per dollar level in both onshore and offshore trade.

Commodity currencies such as the Canadian dollar have been the biggest beneficiaries of improving risk sentiment this week. It fetched C$1.3230, hovering close to its highest level in more than a month, helped by the rebound in oil prices.

The dollar index rose .09 percent at 95.30, after losing 0.7 percent on Wednesday. It has weakened in four out of the last five sessions as traders wager that US interest rates will stay steady in 2019.

While admitting “we still have much to learn in the sector,” analyst Michael Lavery set overweight ratings for both Canadian marijuana companies and told clients to expect attractive growth ahead.

“We do believe the long-term growth opportunities are significant — both from transitioning illicit trade to legal sales, medical sales, and from transitioning sales in health & wellness categories to CBD-infused products,” Lavery wrote. “While timing of further changes is difficult to predict, the pace of further legalization appears to be accelerating.”

Shares of Canopy Growth rallied 3.5 percent in premarket trading following the initiation, while Tilray shares were largely unchanged.

By starting coverage, Piper Jaffray joins a small group of brokerages devoting research to the budding industry. Until now, most cannabis investors — many of which are individuals — had to rely on reports from Cowen analyst Vivien Azer, one of the first from a major firm to cover the sector. Azer issued her 2019 cannabis outlook on Tuesday and raised her projection for U.S. sales to $80 billion by 2030.

Lavery believes there is currently a $15 billion to $50 billion total addressable market between Canada’s medical and recreational market, medical usage in the European Union and CBD-infused products in key U.S. categories. The long-term global cannabis market is likely worth between $250 billion and $500 billion, with over 25 countries already allowing cannabis use in some form, Lavery told clients.

But as governments around the world realize the potential therapeutic effects — or tax revenues — from legalizing marijuana, investors and analysts have deemed the area ripe for returns.

In the U.S., medical use has been approved in 33 states and recreational use has been legalized in 10; the analyst added that it’s possible that the federal government will legalize cannabis within the next two to five years.

The recent passage of the $867 billion farm bill, which was signed into law by President Donald Trump on Dec. 20, also represents regulatory progress, the analyst said. The law includes a provision for industrial hemp legalization that Senate Majority Leader Mitch McConnell, R-Ky., had introduced. The provision removed industrial hemp from the federal government’s list of controlled substances, making it a lawful agricultural commodity.

Sixty-six percent of surveyed American residents now support legalizing marijuana, according to the latest Gallup poll.

“If no federal action happens by 2020, federal legalization could likely be a topic of the upcoming presidential election” Lavery wrote. “Given the apparent popularity with voters, both parties could conceivably co-opt the issue. Once marijuana is federally legal in the US, we expect additional inflows of capital, potentially for acquisitions of existing players.”

The manufacturing industry posted net job gains of 284,000 over 2018, capping its best calendar year since 1997. A priority for President Donald Trump, manufacturing saw marked hiring in December with an additional 32,000 jobs. Most of the gains occurred in blue-collar durable goods manufacturing, with growth in fabricated metals and computer and electronic products, the Labor Department said in its release. The definition of durable goods is items with a life expectancy of three years or more,

The manufacturing industry posted net job gains of 284,000 over 2018, capping its best calendar year since 1997.

A priority for President Donald Trump, manufacturing saw marked hiring in December with an additional 32,000 jobs. Most of the gains occurred in blue-collar durable goods manufacturing, with growth in fabricated metals and computer and electronic products, the Labor Department said in its release. The definition of durable goods is items with a life expectancy of three years or more, such as automobiles, furniture and machinery.

Manufacturing added 207,000 jobs in 2017.

“Manufacturers are bringing people back into the workforce, and we need this trend to continue,” said Dr. Chad Moutray, chief economist at the National Association of Manufacturers. “Our industry currently faces a workforce crisis with more than half a million open jobs today, and 2.4 million jobs expected to go unfilled over the next decade. Closing the skills gap continues to be the top challenge facing manufacturers in the United States and is absolutely essential to ensuring that the sector continues to grow.”